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UK Businesses Prompted To Appeal Bank Loan Decisions

The Better Business Taskforce launched a formal process for appealing bank small business lending six months ago. Small businesses are urged to make their appeals now if they feel their denial for loans bank provided was unjustified. Close to 40 percent of businesses filing appeals have come out winners.

The recent Bank of England report revealed a ten percent year-over-year decrease in outstanding loans to companies with under £1 million turnover. This has led financial experts to prompt small businesses to fight for the money they require. Without this financing, many small businesses will be forced to close their doors, resulting in a gloomy holiday season.

There are several ways that small businesses can have a bank lending rejection overturned. HSBC senior commercial banking manager Mike Conroy recommends that companies approach banks with detailed information regarding their business. He said that when a business is unclear about how much money it needs, this does not inspire confidence from banks. Most rejections are due to inadequate financial information like cash flow predictions.

Small businesses are entitled to appeal lending conditions as well as the decision. Examples include being asked to secure a loan with a home or being offered unusually high loans APR. Most banks will respond to appeals with a 30-day period. Barclays reported that the majority of appeals it receives are resolved within one week. Lloyds TSB reviews appeals within 15 business days, resolving 90 percent of issues in that time. It also offers a £150 goodwill payment to any business with a successful appeal.

RBS-NatWest has a lending appeal hotline for businesses. Use is not limited to bank customers, as the financial institution has also been help businesses that were rejected by other banks, according to a spokesperson. Appeals to Santander bank are handled by a different business banking team than handed down the original lending decision.